Moving from New York to Texas: Tax Savings on Salary 2026

Moving from New York to Texas: Tax Savings on Salary 2026

For working professionals living in New York City, state and city income taxes take a significant slice of every paycheck. NYC residents pay New York State income tax (4% to 10.9%) on top of a separate New York City income tax (3.078% to 3.876%) — both bills hitting at once. Texas, by contrast, has no state income tax and no city income tax. The Texas Constitution, Article VIII §24, prohibits a personal income tax.

This guide calculates the exact dollar saving at three realistic salary levels — $80,000, $150,000, and $250,000 — using verified 2026 NY tax brackets from the New York State Department of Taxation and Finance. It also covers the critical practical issues: how NY taxes you after you leave, how property taxes compare, and how the federal SALT cap affects the calculation.

Use the USA Income Tax Calculator to model your specific salary before and after the move.

New York State and NYC City Income Tax: The Combined Burden

New York City residents face two separate income tax systems that stack on top of each other — plus federal income tax on top of both.

New York State Income Tax (2026): NY state tax applies to all NY residents and starts at 4% on the first $17,150 of taxable income (single filers). The key marginal rates for most working professionals are:

• $80,651 – $215,400: 6.25%
• $215,401 – $1,077,550: 6.85%

Higher earners face 9.65%, 10.3%, and 10.9% on income above $1,077,550, $5 million, and $25 million respectively. Source: NY Department of Taxation and Finance (tax.ny.gov).

New York City Income Tax (NYC residents only): On top of NY state tax, every NYC resident pays a separate city-level income tax. The NYC tax is levied under NYC Admin Code Title 11 and has its own bracket structure:

• $12,001 – $25,000: 3.078%
• $25,001 – $50,000: 3.762%
• $50,001 – $500,000: 3.876%

NYC residents who live in the five boroughs (Manhattan, Brooklyn, Queens, the Bronx, Staten Island) pay this tax in addition to NY state tax. NY state residents who live outside NYC — in Westchester, Long Island, Albany, etc. — do NOT pay the NYC city tax. Only the five boroughs are subject to it.

The combined bite for a NYC resident at a $150,000 salary (single filer) is approximately:

• NY state income tax: ~$10,500
• NYC city income tax: ~$5,400
• Total state + city: ~$15,900/year

Texas: Zero Income Tax — What the Law Actually Says

Texas does not have a state income tax. This is not merely a policy choice that a future legislature could easily reverse — it is constitutionally prohibited. Texas Constitution, Article VIII, Section 24 (added by voters in 1993 and strengthened in 2019 via Proposition 4) requires a statewide voter referendum before any personal income tax can be enacted. Any future Texas income tax would first need to be approved by a majority of Texas voters before the legislature could act.

Texas also has no city-level income tax. Cities like Austin, Dallas, Houston, and San Antonio impose no personal income tax on residents or workers.

For someone moving from NYC, this means the entire state and city income tax line on your tax return drops to $0 from the first day you establish Texas domicile and file as a Texas resident.

The trade-off Texas uses to fund state services is primarily sales tax (6.25% state + up to 2% local = 8.25% combined maximum) and property tax (discussed separately below). For working professionals who earn salaries rather than consume proportionally to income, the net tax environment is typically far lower in Texas than in New York.

Salary Examples: Your Exact Savings at Three Income Levels

The following examples use 2026 NY tax brackets (single filer, standard deduction applied at NY level) for a NYC resident and compare to a Texas resident paying $0 in state/city income tax. All figures are approximate — individual results vary based on filing status, deductions, and other income sources.

Example 1: $80,000 Salary — NYC Resident Moving to Austin, TX

Example 2: $150,000 Salary — NYC Resident Moving to Dallas, TX

Example 3: $250,000 Salary — NYC Resident Moving to Houston, TX

NY state effective rate note: at $250,000, the 6.85% bracket applies to most of the income above $215,400 after the standard deduction. NYC city tax applies the 3.876% top bracket to all income above $50,000 for NYC residents. At this salary level the combined marginal rate from state + city alone is over 10.7% on the top dollar of income — before federal tax.

Cumulative Savings Summary Table

For a quick comparison of annual and multi-year savings across all three examples:

These projections hold salary constant. In reality, salary increases compound the saving further — a higher salary in later years would be taxed at even higher NY rates (potentially reaching the 9.65% bracket above $1 million) while remaining at $0 in Texas.

Property Tax Trade-Off: Texas vs New York

The standard objection to the Texas tax-saving narrative is that Texas property taxes are high. This is true — but the numbers still favour Texas for working professionals on a combined basis.

Texas property tax: Texas has no state property tax; rates are set by local taxing authorities. The combined effective rate in most Texas metros runs approximately 1.5%–2.2% of assessed value before exemptions. Texas offers a homestead exemption that reduces the assessed value of a primary residence by a mandatory $140,000 for school taxes (as of 2023). After the homestead exemption, many Texas homeowners see effective rates of approximately 1.0%–1.5% on market value.

A $500,000 home in Austin after the homestead exemption might cost roughly $4,000–$5,500/year in property tax depending on location and total millage rate.

New York / NYC property tax: New York City Class 1 residential properties (1–3 family homes) are taxed at an effective rate of approximately 1.2%–1.3% of market value — low by NYC standards because the assessed value is set at a fraction of market. However, NYC market values are extremely high, so the absolute bill is substantial. A $500,000 Class 1 home in NYC carries roughly $5,500–$7,000/year in property tax.

Outside NYC (Long Island, Westchester, upstate), NY effective property tax rates are typically 1.5%–3%+ of market value, often well above Texas rates. Nassau County and Westchester County consistently rank among the highest property tax areas in the US.

Combined income + property tax comparison (same $500k home, $150k salary):

Even accounting for Texas's above-average property taxes, the combined income + property tax burden strongly favours Texas for working homeowners. Property tax alone is not a reason to stay in New York.

NY Domicile Rules and Audit Risk

Moving to Texas does not automatically end your New York tax obligation. New York State aggressively pursues high-income taxpayers who claim to have moved, and the NY Department of Taxation and Finance maintains one of the most active residency audit programmes in the country.

What triggers continued NY tax liability:

• Statutory residency: If you maintain a permanent place of abode in New York AND spend more than 183 days in New York during the year, NY taxes you as a full-year resident — regardless of where you claim domicile.
• Domicile: Even if you avoid the 183-day trap, NY can still tax you as a domiciliary (legal home) if you have not truly abandoned NY as your permanent home.

Steps required to establish Texas domicile:

1. Obtain a Texas driver's licence (surrender your NY licence)
2. Register to vote in Texas
3. Update your address on all bank accounts, investment accounts, and legal documents
4. File a Texas Declaration of Domicile if desired (not legally required but helpful as evidence)
5. Change your primary healthcare provider to Texas
6. Move your safe deposit box and important documents to Texas
7. If applicable, change your business registration and primary office to Texas
8. Spend fewer than 183 days in New York in the year of the move and each subsequent year

High-income audit risk: NY DTF routinely audits taxpayers who formerly earned over $100,000 in NY and filed a part-year or non-resident return after claiming to move. They will examine credit card records, cell phone location data, EZ-Pass records, and social media. The 183-day count must be documented. If you work remotely and still have a Manhattan apartment, NY will scrutinise whether that apartment qualifies as a "permanent place of abode."

Practical rule: Consult a NY tax attorney — not merely an accountant — before the move if your NY income exceeds $150,000. The potential saving justifies the legal cost. The stakes are high: if NY successfully argues you remained a statutory resident for a full year, you could owe NY state and NYC city tax on your entire income for that year even while paying Texas real estate taxes.

SALT Deduction Interaction: How Federal Tax Changes the Picture

The federal State and Local Tax (SALT) deduction was capped at $10,000 per year by the 2017 Tax Cuts and Jobs Act. Under current 2026 tax law (with TCJA extensions), the cap has been raised to $40,000 for most taxpayers. This change significantly affects how federal taxes interact with the NY-vs-TX comparison.

For NYC residents (before moving): A $150,000-income NYC resident paying ~$15,900 in state + city income tax plus ~$6,500 in property tax has total state/local taxes of ~$22,400. Under the $40,000 SALT cap, they can deduct the full $22,400 on their federal return, saving roughly $5,400 at a 24% federal marginal rate.

For Texas residents (after moving): A Texas resident paying $0 in state income tax but ~$4,500 in property tax has only $4,500 in SALT to deduct — far below the $40,000 cap. They deduct less on their federal return. The federal deduction saving drops from ~$5,400 to ~$1,080 — a loss of about $4,300 in federal deduction benefit.

Net calculation including SALT:

Even accounting for the lost federal SALT deduction benefit, the net saving is still substantial — approximately $13,600/year at $150,000 salary after the SALT adjustment. At $250,000 salary where the federal marginal rate is higher (32%+), the dynamics shift further but the Texas advantage remains clearly positive. See the full guide: SALT Deduction for Homeowners 2026.

Practical Steps for Making the Move

If the numbers justify a move, here is the practical sequence that tax advisors typically recommend for NYC-to-Texas relocations:

Before the move (planning phase):

• Consult a NY-specialised tax attorney — particularly if earning over $150,000. Get advice on the 183-day rule and what constitutes abandonment of NY domicile for your specific situation.
• Determine the tax year in which you want to become a Texas resident — moving in January gives you a full first year as a Texas resident.
• If you own NYC real estate, decide whether to sell or rent. Retaining a NYC apartment as a "permanent place of abode" while spending 183+ days in TX creates statutory residency risk.

The move (execution phase):

• Obtain a Texas driver's licence within 90 days of establishing residence (Texas law requirement).
• Register to vote in Texas. Cancel your NY voter registration.
• Update your primary address with the IRS, Social Security Administration, all banks, brokerages, and retirement account custodians.
• Notify your employer to update your payroll withholding state to Texas (no state withholding required).
• If self-employed, update your business registration to Texas if applicable.

First year as Texas resident:

• File a NY part-year resident return for the year of the move, reporting NY income earned while still a NY resident.
• Keep a detailed day-count log for the year of the move — document where you physically were each day.
• Do not spend 183+ days in NY for the remainder of the tax year once you've moved.
• File as a Texas resident (federal return only — no state return) going forward.

After the move:

• Claim the Texas homestead exemption on your new home by March 1 of the following year to reduce your property tax assessed value.
• Retain all documentation of Texas residence indefinitely. NY audit windows can extend years after a move.